Govt Of India Slaps Rs 75,000 Penalty On Amazon For This Reason; CAIT Calls It Bold Step

Govt Of India Slaps Rs 75,000 Penalty On Amazon For This Reason; CAIT Calls It Bold Step
Govt Of India Slaps Rs 75,000 Penalty On Amazon For This Reason; CAIT Calls It Bold Step

Govt Fines Ecommerce Giant Amazon For Not Displaying “Country Of Origin” On Products 

Recently, the government has rapped Amazon for not displaying the mandatory information about products. According to an official, the government has imposed a fine on Amazon after finding that its reply to the notice sent was not found to be satisfactory. 

According to the Legal Metrology (Packaged Commodities) Rules, 2011 it is mandatory for e-commerce companies to display information like country of origin of products on their digital platforms.

Notice, Unsatisfactory Reply and Fine

Last month, both e-commerce retailers, Amazon as well as Flipkart were issued a notice by the consumer affairs ministry asking them to explain why action should not be taken against them due to the absence of mandatory information on their listings within a period of 15 days as per the provisions of the Legal Metrology Rules, 2011.

However, out of the two, Amazon was fined as the matter did not elicit immediate response from their end. Amazon was fined INR 25k per director for the first offence. However, for repeated and multiple violations the penalty is 50k and/or imprisonment. Also currently there is no clarity if at all there will be a cap on the fine. Flipkart has not been fined.

Officials from the Department for Promotion of Industry and Internal Trade(DPIIT) have had several virtual meetings with ecommerce companies for the compliance on disclosing the country of origin information.

According to a senior executive at Flipkart, they have converted upto 80% of all legacy listings on the platform.

This move has been hailed as “Bold but a desired step” by Confederation of All India Traders(CAIT), a lobby group of small offline retailers.

However, an Amazon spokesperson said that “ is a marketplace enabling third party sellers to list and offer goods for sale to customers in India. Third-party sellers list, own and sell products on the marketplace, and they are also responsible for updating the country of origin, as legally mandated. We display country of origin information for all products as provided to us by the sellers”

What can be done by etailers towards solving it?

There are millions of sellers, hence millions of listings. Out of these many listings, some are old and some new. While the new listings reflect the country of origin, the issue persists for the existing and legacy listings which are in millions and will take a substantial amount of time to be updated. Another problem that is faced while ascertaining the country of origin is the multiple sourcing of products.

Hence, while responding to the government, these ecommerce companies are seeking extended deadlines on behalf of their sellers who in the meantime shall update the older listings.

Also, ecommerce enables MSMEs to sell online as well as exports and such policy decisions like fines put a burden on a sector which despite being the employment generator is vulnerable with a high death rate.

Hence the government must devise a policy with a soft heart but monitor and execute it with iron fist!

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